A $19 factory price for a 100% wool sweater can sound either surprisingly low or unreasonably high, depending on what is included.
So where does the money actually go?
This cost breakdown uses a real production scenario: a 350g pure wool sweater knitted in 12GG with 2/26Nm yarn, ordered in five colours with 100 pieces per colour. The quoted factory price is USD 19 per piece.
Instead of presenting a vague price range, we will open the cost structure line by line, including yarn, knitting, linking, special washing, finishing, trims, packaging, quality control, equipment depreciation and factory margin.
The Short Answer
Under the specifications used in this case:
- Factory price: USD 19.00
- Estimated production cost: USD 16.41
- Gross profit per sweater: USD 2.59
- Gross margin: approximately 13.6%
The yarn alone costs about USD 12.08 per garment after allowing for production loss. That means raw material represents approximately 73.6% of the total production cost.
This is why a buyer cannot accurately answer “how much does it cost to manufacture a sweater?” without confirming fibre content, garment weight, gauge, yarn count, colour quantity, finishing and order volume.
Costing Assumptions
The calculations below are based on the following confirmed specifications.
| Item | Production specification |
|---|---|
| Fibre composition | 100% wool |
| Yarn count | 2/26Nm |
| Yarn purchase price | RMB 230/kg |
| Knitting gauge | 12GG |
| Finished garment weight | 350g |
| Order quantity | 500 pieces |
| Colour quantity | 5 colours |
| Quantity per colour | 100 pieces |
| Washing process | Softening wash, shrink-control treatment and hand-feel finishing |
| Factory price | USD 19 per piece |
| Exchange rate used for this model | USD 1 = RMB 7.20 |
The exchange rate is a costing assumption, not a live foreign-exchange quotation. Final commercial prices should use the exchange rate agreed when the order is confirmed.
The model assumes a basic crew-neck silhouette without intarsia, jacquard, embroidery, zippers or other labour-intensive details.
Complete $19 Wool Sweater Cost Breakdown
| Cost item | RMB per piece | USD per piece | Share of production cost |
| Wool yarn, including 8% production allowance | 86.94 | 12.08 | 73.6% |
| 12GG knitting | 6.50 | 0.90 | 5.5% |
| Linking and sewing | 4.20 | 0.58 | 3.6% |
| Special washing treatment | 5.50 | 0.76 | 4.7% |
| Finishing and pressing | 3.20 | 0.44 | 2.7% |
| Trims and packaging | 2.80 | 0.39 | 2.4% |
| Quality control | 1.50 | 0.21 | 1.3% |
| Equipment, energy and maintenance | 1.80 | 0.25 | 1.5% |
| Production management and order service | 3.20 | 0.44 | 2.7% |
| Local handling, administration and document allocation | 2.50 | 0.35 | 2.1% |
| Total production cost | 118.14 | 16.41 | 100% |
| Factory gross profit | 18.66 | 2.59 | |
| Factory price | 136.80 | 19.00 |
This is a factory costing model rather than a universal market price. Actual results change with yarn availability, sweater size ratio, stitch density, wastage, colour minimums, testing requirements and delivery terms.
1. Wool Yarn: USD 12.08
The finished sweater weighs 350g, but the factory cannot calculate yarn cost using finished weight alone.
Additional yarn is required for:
- Machine setup
- Tension adjustment
- Waste panels
- Yarn ends
- Panel repair
- Colour changes
- Damaged pieces
- Washing-related weight variation
For this five-colour order, the costing model uses an 8% yarn allowance.
Yarn requirement per garment
350g × 1.08 = 378g
Yarn cost per garment
0.378kg × RMB 230/kg = RMB 86.94
Converted to US dollars
RMB 86.94 ÷ 7.20 = USD 12.08
For the complete order:
378g × 500 pieces = 189kg of costed yarn
The 8% allowance should not be interpreted as guaranteed physical waste. It is a commercial production allowance covering setup, irregular loss and material risk across five colour lots. The actual figure should be checked after sampling and size grading.
If a brand requests certified wool, the yarn price may also depend on fibre origin and chain-of-custody requirements. The Responsible Wool Standard covers animal welfare, land management and supply-chain certification, but RWS status must be verified for the specific yarn and transaction.
2. 12GG Knitting: USD 0.90
A 12GG sweater is considered fine gauge knitwear. It creates a cleaner, lighter and more refined surface than a chunky 3GG or 5GG structure, but it also requires appropriate yarn preparation, machine settings and density control.
The RMB 6.50 knitting allocation includes:
- Computerized flat-knitting machine time
- Programming for a basic structure
- Operator labour
- Machine setup
- Five-colour yarn changes
- Electricity
- Panel inspection
- Minor panel repair
This figure applies to a basic design. Intarsia, jacquard, pointelle, cable structures, engineered ribs and complicated fully fashioned shaping require more machine time and separate costing.
YouTricot’s high-end knitwear production upgrade explains how 12GG STOLL capacity is used for fine-gauge wool, cashmere and blended-yarn development.
3. Linking and Sewing: USD 0.58
After knitting, the panels must be linked and assembled. For a basic crew-neck sweater, this normally includes:
- Shoulder linking
- Sleeve attachment
- Side seams
- Neck trim attachment
- Loose-yarn finishing
- Initial measurement check
The model allocates RMB 4.20, or approximately USD 0.58, per garment.
Reducing this cost too aggressively can lead to uneven shoulders, distorted necklines, missed stitches, bulky seams and poor alignment. These issues may not be visible in a quotation, but they become obvious when the garment is worn.
4. Special Washing: USD 0.76
This sweater receives more than a basic rinse. The specified process includes:
- Softening wash
- Shrink-control treatment
- Hand-feel adjustment
The RMB 5.50 allocation covers chemicals, water, energy, washing equipment, labour, trial washing and separate batch handling for five colours.
Washing affects more than softness. It can change garment measurements, stitch appearance, surface character and colour. The approved sample should therefore be evaluated after the final washing process, not before it.
For formal testing, ISO 5077 describes the determination of dimensional change after washing and drying. The test method does not guarantee a particular shrinkage result; it provides a consistent way to measure the change.
Shrink-control finishing also does not automatically make every wool sweater machine washable. The final care claim must reflect the actual yarn, treatment and garment test results.
5. Finishing and Pressing: USD 0.44
After washing, each sweater still requires finishing.
The RMB 3.20 allocation covers:
- Controlled drying
- Steaming and shaping
- Measurement correction
- Thread trimming
- Surface cleaning
- Final hand-feel review
- Pressing and folding
Finishing is easy to underestimate because it does not add a visible component. However, it strongly affects symmetry, measurements, presentation and the way the garment feels when the customer first handles it.
6. Trims and Packaging: USD 0.39
The trims and packaging allowance is RMB 2.80 per garment.
A basic private label knitwear package may include:
- Woven neck label
- Size label
- Fibre and care label
- Hangtag and string
- Spare yarn
- Tissue paper
- Individual polybag
- Carton allocation
Custom woven labels, FSC-certified hangtags, recycled packaging, barcode stickers, premium boxes and retail-ready packing can increase this amount.
Brands developing their own label system can review YouTricot’s private label sweater manufacturer guide for a broader explanation of labels, packaging, yarn selection and low MOQ production.
7. Knitwear Quality Control: USD 0.21
The RMB 1.50 quality-control allocation covers routine in-process and final inspection.
Checks may include:
- Yarn lot and colour review
- Knitted-panel measurements
- Linking quality
- Finished garment measurements
- Surface defects
- Colour consistency
- Garment weight
- Labels and packaging
This allowance does not include independent laboratory testing or a third-party final inspection.
If the buyer requires formal pilling evaluation, ISO 12945-3 specifies a random tumble method for assessing resistance to pilling, fuzzing and matting. The required method and acceptance level should be agreed before production.
For skin-contact safety claims, OEKO-TEX STANDARD 100 covers testing for harmful substances. Certification should never be implied solely because a factory has worked with certified materials; the applicable certificate, scope and validity must be checked for the product or component concerned.
8. Equipment, Energy and Maintenance: USD 0.25
Computerized knitting machines, linking equipment, washing machines, dryers and pressing equipment all have operating costs.
The RMB 1.80 allocation includes a share of:
- Equipment depreciation
- Electricity
- Preventive maintenance
- Spare parts
- Machine downtime
A factory that excludes equipment depreciation may appear cheaper in the short term, but stable knitwear production depends on maintained machines, reliable settings and available technical support.
9. Production Management: USD 0.44
The RMB 3.20 management allocation covers work that is necessary but not physically attached to the sweater:
- Production planning
- Purchase-order administration
- Five-colour tracking
- Specification review
- Sample and approval records
- Warehouse handling
- Communication
- Defect and remake risk
Although the total order is 500 pieces, dividing it into five colours creates five production batches of only 100 pieces. Each colour requires setup, material control, washing separation and colour-specific inspection.
This is one reason a low MOQ knitwear factory cannot simply apply the unit cost of a large single-colour order. For a wider explanation, see YouTricot’s low MOQ knitwear manufacturer guide.
10. Local Handling and Commercial Administration: USD 0.35
The final RMB 2.50 allocation covers local handling, carton movement, basic commercial administration and document preparation.
This line is not presented as a statutory tax rate. Tax treatment, export rebates, local transport and document costs depend on the legal seller, invoice structure, shipment method and agreed Incoterm.
A factory price, EXW price and FOB price are not automatically the same. Buyers comparing FOB knitwear China quotations should confirm the named port and the exact Incoterms version used. The International Chamber of Commerce’s Incoterms 2020 is the authoritative reference for current Incoterms rules.
How Much Profit Is Built Into the $19 Price?
At the model exchange rate:
USD 19 × RMB 7.20 = RMB 136.80 revenue per garment
RMB 136.80 − RMB 118.14 = RMB 18.66 gross profit
RMB 18.66 ÷ RMB 136.80 = 13.6% gross margin
The factory therefore earns a gross profit of approximately USD 2.59 per sweater.
That is not the same as net profit. Gross profit must still absorb commercial risks such as:
- Exchange-rate movement
- Late material delivery
- Reworking
- Replacement garments
- Unplanned machine downtime
- Payment terms
- Quality claims
- Production delays
A 13.6% gross margin is commercially workable, but it is not excessive for a 500-piece, five-colour custom knitwear OEM order.
Why a $15 Quote Would Not Be Credible Under the Same Specification
At the same exchange rate, a USD 15 factory price equals RMB 108.
The calculated production cost is RMB 118.14, creating a loss of RMB 10.14 per garment before unexpected production risk.
A supplier quoting USD 15 would therefore need to change at least one condition:
- Use less than 100% wool
- Reduce garment weight
- Purchase cheaper yarn
- Exclude normal yarn loss
- Simplify washing
- Reduce finishing labour
- Charge trims separately
- Exclude commercial handling
- Use a larger order assumption
- Accept a deliberate loss on the first order
A low quote is not necessarily dishonest. It may simply describe a different product or a different scope. Buyers should compare specifications, not just totals.
What Can Change the Cost of Custom Knitwear?
When buyers ask “how much does custom knitwear cost?”, the main variables are usually:
Fibre composition
Wool, merino wool, cashmere, cotton, acrylic and blended yarns have very different prices and performance characteristics.
Garment weight
A 350g sweater uses considerably more material than a 220g fine-gauge top. In this case, yarn is the largest cost component, so weight changes have an immediate effect.
Gauge and stitch structure
Gauge alone does not determine cost. Stitch density, garment dimensions, machine time and structure must be considered together.
Order quantity and colour split
Five hundred pieces in one colour are usually more efficient than five colours of 100 pieces each.
Washing and finishing
Softening, shrink control, brushing, enzyme washing and special hand-feel treatments require additional trials and process control.
Trims and packaging
Private labels, care labels, hangtags, barcodes and custom packaging should be specified before the final quote.
Quality and testing requirements
Measurement tolerances, pilling, colour fastness, shrinkage, fibre composition and harmful-substance testing can affect both cost and production time.
Trade terms
EXW, FOB, CIF and other terms allocate transport, documents, costs and risks differently. The named place or port also matters.
What Should a Buyer Ask Before Comparing Sweater Quotations?
A reliable quotation should answer these questions:
- Is the quoted composition exactly 100% wool?
- What yarn count and yarn price are assumed?
- Is the 350g weight measured before or after washing?
- Is yarn loss included?
- Does the quote cover five colours?
- Are colour minimums or dyeing surcharges included?
- Does the price include softening and shrink-control treatment?
- Are labels, trims and packaging included?
- What quality checks are included?
- Is the price EXW, FOB or based on another term?
- What happens if bulk measurements differ from the approved sample?
- Are testing and third-party inspection charged separately?
For buyers new to China sourcing, the China sweater OEM and knitwear OEM guide explains the complete process from yarn selection and sampling to bulk production and shipment.
FAQ
How much does it cost to manufacture a sweater?
In this case, a 350g, 100% wool, 12GG sweater costs approximately USD 16.41 to produce and is quoted at USD 19. The answer changes with yarn composition, weight, stitch structure, colour quantity, MOQ, washing, trims, quality requirements and trade terms.
How is the yarn cost of a wool sweater calculated?
Start with finished garment weight, add a realistic production allowance, and multiply the result by the yarn price.
For this sweater:
0.350kg × 1.08 × RMB 230/kg = RMB 86.94
The costed yarn quantity is 378g per garment.
Is 2/26Nm wool yarn suitable for a 12GG sweater?
It can be suitable, but yarn count alone does not confirm the final construction. Ply arrangement, knitting density, stitch structure and target hand feel must be tested on the intended machine. A washed swatch or prototype should be approved before bulk production.
Why does a five-colour order cost more than a single-colour order?
Each colour requires separate setup, material handling, batch identification, washing and inspection. Five colours of 100 pieces do not have the same production efficiency as one colour of 500 pieces.
Does shrink-control treatment make wool machine washable?
Not automatically. The care claim must be based on the specific yarn, treatment and finished-garment test results. Woolmark recommends following the garment care label and generally advises flat drying unless the care claim specifically permits tumble drying. See Woolmark’s official wool care guidance.
Is the USD 2.59 factory profit guaranteed?
No. It is the gross profit produced by this model. Exchange-rate changes, defects, reworking, replacement pieces, delays and payment terms can reduce the final net profit.
What is a reasonable MOQ for private label knitwear?
MOQ depends on yarn availability, colour minimums, gauge, design complexity and finishing. Stock-yarn programs can sometimes support smaller orders, while custom colours and premium natural fibres usually require higher minimums.
Can the price be reduced without lowering quality?
Sometimes. The most practical options are reducing colour count, simplifying packaging, using an available yarn colour, increasing quantity or adjusting garment weight. Removing essential quality control or hiding a change in fibre composition is not a responsible cost-saving method.
A Transparent Price Is More Useful Than the Lowest Price
This $19 sweater contains approximately USD 16.41 in production cost and USD 2.59 in factory gross profit.
The largest cost is not labour or factory margin. It is the 100% wool yarn.
For fashion brands, wholesalers and private label knitwear buyers, that distinction matters. A quotation should show what is being purchased: material, weight, gauge, construction, finishing, quality control and delivery responsibility.
A sustainable supplier relationship does not require a factory to work without profit. It requires both sides to understand what the price includes and what must change when the target price changes.
Planning a Wool Sweater Program?
If your team is developing fine gauge knitwear, private label knitwear or a custom wool sweater collection, send YouTricot your tech pack, target composition, garment weight, colour quantity and expected MOQ.
We can review the specification and prepare a cost structure based on the actual yarn, gauge, construction, washing and packaging requirements.
Request a practical knitwear cost review before confirming sampling or bulk sweater production.